USA: Exiting seating business drags Visteon into second quarter loss - report

By just-auto.com editorial team | 21 July 2003

Visteon Corporation has reported a second-quarter net loss as the automotive parts maker booked the costs of getting out of the unprofitable business of making seats, Dow Jones Business News reported.

Visteon, spun off from Ford in 2000, made a net loss of $US167 million, or $1.33 a share, in contrast to net income of $72 million, or 56 cents a share, a year earlier, the report said.

According to Dow Jones, results for the latest quarter included a charge of $170 million, or $1.35 a share, for costs related to exiting the seating business and continuing to put its European streamlining plan into effect.

Dow Jones noted that Visteon announced in March that it was exiting its seating business, located in Chesterfield, Michigan, through an agreement with Ford to transfer seat production to another supplier.

Exiting the seating business accounted for $139 million of the total second-quarter charge, Dow Jones said, adding that the remaining $31 million covered the costs of employee severances in Germany. Visteon expects to take additional, smaller charges for the European plan in the third and fourth quarters, the report added.

Dow Jones said sales fell 8.5% to $4.61 billion from $5.04 billion, reflecting a 14% reduction in Ford's North American volume, while Visteon, which has been trying to diversify its source of revenue, said sales to customers other than Ford and affiliates grew 12% to $1.02 billion.

Visteon had $851 million in cash and marketable securities at the end of the quarter, down from $947 million at the end of the first quarter, and debt increased slightly, to $1.7 billion, as it began to draw on a loan to finance new construction in Southeast Michigan, Dow Jones said.